Lowenstein Sandler secured summary judgment in an insurance coverage lawsuit filed on behalf of our client, Mist Pharmaceuticals, LLC (Mist). This important victory reimposes on Berkley Insurance Company (Berkley), Mist’s D&O insurer, a duty to defend our client.

Mist is a defendant in a lawsuit pending in Delaware alleging that Mist and its directors and officers diverted corporate opportunities from a joint investment. Initially, Berkley defended Mist in that suit, but Berkley suddenly withdrew from its defense one business day before a scheduled mediation. Berkley contended that its D&O policy did not provide coverage because the “claim” against Mist and its directors and officers was made years before Berkley’s D&O policy went into effect.  

On behalf of our client, Lowenstein filed a summary judgment motion arguing that Berkley’s policy did, in fact, apply and that it owed Mist a defense obligation. Finding for our client, the court agreed with our argument that there was no prior “claim” because Mist’s co-investor did not present Mist with a “written demand for monetary or non-monetary relief” before the filing of the present suit.

In its decision, the court found that the Mist Insureds never previously received a writing, described by the court as “something set forth on paper or other non-electronic media, such as a letter or memo of some sort; typed, or created by hand with a pen, pencil, crayon, or marker. Or perhaps an electronic document such as a PDF, Word, text message, tweet, Snapchat or an Instagram caption; … Perhaps even a meme of some kind could do the trick.” 

The court even quoted “Jerry McGuire” to find that the policy requirement of “demand for monetary … relief” requires a statement of “show me the money” (or similar statement) and that no such demand was ever made against the Mist Insureds before the current lawsuit.

As a result of this victory, the Mist Insureds are now entitled to file a motion with the court to recover the coverage counsel fees incurred to achieve this victory. 

The Lowenstein team included Lynda A. Bennett and Eric Jesse.